By Harry Mottram: Two of Bath’s rival clubs in the Gallagher Premiership Worcester Warriors and Wasps rugby clubs have gone bust.
The Cost Of Living Crisis has hit professional rugby union hard with league of 12 clubs now two clubs down with potentially more to follow making the entire structure potentially unviable with fewer games and less revenue from the fans on match day.
Match days pay big money when you throw in corporate and private hospitality, programme sales, bar and burger takings with The Mirror reporting for instance that Leicester Tigers will lose around £700,000 as a result of the cancelled games against the two teams.
The reason why rugby clubs are in trouble is not hard to spot. It’s all about debt and with the hike in inflation and interest rates suddenly those debts are impossible to service.
Worcester went into administration owing around £25 million while ICSM understands Wasps are in debt by £100 million pounds.
According to the website Ruck, Bath RFC owe £37 million, Newcastle Falcons are in debt to £39 million, Saracens RFC have debts of £40 million, and Bristol Bears owe £51 million.
Harlequins have hit out at a report in the Daily Mail last month that they owe the taxman £1.6 million saying that was not true – but they still have debts of more than £33 million pounds – and that’s the problem. If the Bank of England raise interest rates again – then servicing these volumes of debts will push more clubs into administration and the league will potentially collapse. Much of the debts are from banks and lenders, but also the tax man, VAT and major suppliers such as food and drink wholesalers.
With a credit squeeze on incomes many fans will stay away increasing the pressure on club finances.